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The Principles for Positive Impact Finance were launched on January 30th, 2017 in Paris. More information available here.
In October 2015 UN Environment Finance Initiative’s (the Finance Initiative) banking and investment members released the Positive Impact Manifesto, which calls for a new financing paradigm. As per the Manifesto, bridging the funding gap for sustainable development and the attainment of the SDGs requires a new, impact-based approach, based on a holistic consideration of the three pillars of sustainable development.
The development of a dedicated set of Principles for Positive Impact Finance to guide financiers and investors in their efforts to increase their positive impact on the economy, society and the environment, constitutes a central component of the Positive Impact Roadmap outlined in the Manifesto.
By providing a common language to the finance community and for a broader set of stakeholders, the Principles are expected to constitute an important step in unlocking the SDGs opportunity and overcoming the funding gap for sustainable development.
Purpose of the Principles
The Principles for Positive Impact Finance are a set of guidelines for:
- financiers to identify, promote and communicate about Positive Impact Finance across their portfolios;
- investors and donors to holistically evaluate the impacts of their investments and orient their investment choices and engagements accordingly;
- auditors and raters to provide financiers, investors and their stakeholders with the verification, certification and rating services needed to promote the development of Positive Impact Finance.
The Principles are also intended to help:
- corporates and other economic stakeholders structure SDG-focused business opportunities and business models, and identify financial institutions capable of accompanying their efforts;
- governments to leverage their interventions with the private sector (for instance by issuing impact-based tenders and requests for proposals and choosing its private sector implementation partners based on the Principles) and adjusting public policies strategically to maximise the leverage of public funds;
- civil society to identify and develop the kind of technical expertise that will be most helpful to the above parties as they seek to establish new, impact based business models.
The Principles for Positive Impact Finance
The Principles are applicable to all forms of financial institutions and financial instruments. By jointly considering the three pillars of sustainable development and by basing themselves on an appraisal of both positive and negative impacts, they propose a holistic approach to sustainability issues.
In doing so the Principles build on and complement valuable existing frameworks such as the Green Bond Principles (instrument-specific), the Principles for Responsible Investment (sector-specific), the Equator Principles (risk focused), among others, to provide a broad, common framework to achieve the financing of sustainable development.